Latest U.S. Govt Data Shows Canadian Oil Exports to U.S. Rising

Workers use heavy machinery in the tailings pond at the Syncrude oil sands extraction facility near the town of Fort McMurray.

It might seem like Canadian oil producers haven’t had much to smile about lately, given the threat of surging oil production in the U.S., their key customer, and transportation bottlenecks depressing prices for their own product, Western Canadian Select.

But data from the U.S. Energy Information Administration released Monday continues to show one positive theme: U.S. demand for Canadian crude is going up.

U.S. imports of Canadian crude oil reached almost 3 million barrels a day in February, up almost 12% from the same month in 2012, according to EIA data out Monday. Imports for January were also higher than a year earlier, putting the year-to-date increase in crude imports from Canada at 10.7%.

That contrasts with imports of crude oil from the U.S.’s next three biggest customers—Saudi Arabia, Mexico and Venezuela–which were all down in the January-February period versus first two months of 2012.

That U.S. demand for Canadian oil continues to hold up is likely to provide some reassurance to Canadian oil producers, especially with the EIA projecting that U.S. domestic crude oil output is on track to soon surpass imports. Canadian officials and oil-patch executives have worried the oil boom south of the border might make Canadian crude less attractive one day.

So far, that’s not the case. Still, prices that producer can fetch for that oil have been on a roller coaster of late–plunging late last year and early this year, and wreaking havoc on Alberta’s provincial budget. That’s down to a lack of pipeline space from Canada to the U.S. Gulf Coast refineries that can process the stuff.

Prices have recovered, but Ottawa and Edmonton continue to lobby hard for more pipelines to the U.S., to help alleviate all the price volatility–including TransCanada Corp.'s Keystone XL.

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